MOSCOW, Feb 8 (Reuters) - Russia’s central bank held its key interest rate at 7.75 percent on Friday in line with market expectations and indicated it could refrain from raising rates this year despite inflationary risks.

Having increased rates twice in 2018 to keep a lid on inflation and reduce pressure on an already weak rouble, the central bank said it would need to assess whether these hikes were enough. It also left out a previous pledge to consider the necessity of further rate increases in the future.

“The Bank of Russia will determine if the increases of the key rate in September and December 2018 were sufficient to bring annual inflation back to the target in 2020,” the central bank said.

“In January 2019, annual inflation held at the lower bound of the Bank of Russia expectations.”

Analysts interpreted this statement as an indication that the central bank, which aims to keep inflation close to its 4 percent target, would hold its rates unchanged until next year.

“The less hawkish nature of the Russian central bank’s statement means that we no longer expect an interest rate hike in the coming months,” Capital Economics research firm said in a note.

“Instead, with inflation likely to return to target in 2020, we think that interest rate cuts will come back onto the agenda next year.”

Oleg Kouzmin, chief economist at Renaissance Capital, said that the central bank was unlikely to raise rates this year unless the country was faced with higher-than-expected inflation.

“We keep our view that the CBR is likely to keep rates on hold during the whole year unless due to some reason inflation reaches as much as 6 percent at its peak in March-April,” he said.

The central bank said it expected inflation, which reached 5 percent in January, to peak in the first half of 2019 because of pressure caused by a weaker rouble and a hike in value-added tax (VAT).

“The effect of the VAT increase on inflation can be fully assessed no sooner than this April,” the central bank said in the statement.

The central bank confirmed its view that inflation would return to its 4 percent target in 2020 but warned that geopolitical factors could lead to increased volatility in commodity and financial markets, which could affect the rouble and inflation expectations.

A Reuters poll conducted earlier this year found that analysts unanimously expected the central bank to leave the key rate unchanged this week and the consensus forecast was that it would keep it unchanged by the end of this year.

The rouble shrugged of the rate decision, hovering near 66 versus the dollar.

The next rate-setting meeting that will be accompanied by a press conference with central bank Governor Elvira Nabiullina is scheduled for March 22. (Reporting by Gabrielle Tétrault-Farber and Andrey Ostroukh; Editing by Toby Chopra)